State Legislatures and Industry Associations Pursue Updates to Self-Storage Laws

The past year has been busy for self-storage operators trying to keep up with legislative changes that affect the operation of their facilities, and it appears the trend will continue well into 2013. Nearly half of U.S. state legislatures have recently made changes to self-storage laws or are considering new legislation. In all, 12 states have altered or added to their statutes in recent months, while 10 others are currently pursuing new lien laws.

“It is an exciting time in the self-storage industry,” said Scott Zucker, a partner in the Atlanta law firm Weissmann Zucker Euster Morochnik P.C. “After 20-plus years of antiquated legislation, we’re now seeing the evolution of laws that are not only up to date with the technology that is available but are more in line with the practical operation of the business of self-storage.”

The national Self Storage Association (SSA) reported it is working with 18 state associations to improve laws affecting self-storage. To date, 17 bills have been introduced in 12 of those states since the beginning of the year, the SSA said.

States that recently updated laws governing self-storage include Arizona, Colorado, Florida, Illinois, Kansas, Maine, Michigan, Nevada, Ohio, Rhode Island, Tennessee and Texas. Ohio’s recent change included the use of e-mail for lien-sale notifications as well as the right to tow abandoned vehicles and boats and a limitation on the value of stored property in a unit. It also provided guidelines for the advertisement of a lien sale through a “commercially reasonable manner” (assuming the presence of at least three independent bidders at the sale), Zucker said.

In Illinois, recent changes to the Self-Service Storage Facility Act permit operators to have vehicles and boats towed from the facility after 60 days of default in lieu of processing the titled property for sale, which Zucker says is a “cumbersome and legalistic process.”

“The new law also creates a statutory enforcement of the limitation of value that should be contained in all self-storage rental agreements and provides for a statutory late fee that can be charged when a tenant is delinquent in rental payment,” he said.

Zucker provides legal counsel to several state self-storage associations and is currently updating the rental agreement provided through the Illinois Self Storage Association to include changes from the statute. The association has not announced when the new agreement will be released, he said.

“Effectively, the changes in the law clarify rights of self-storage operators and remove certain ambiguities that have developed as the industry has matured,” Zucker explained. “Ultimately, the changes we are seeing, in Illinois and around the country, demonstrate a focus on protecting both self-storage operators and their customers by clarifying their responsibilities when they take the role of a landlord and a tenant at a self-storage facility.”

States pursuing new lien-law legislation are Alabama (House Bill 314), California (Assembly Bill 983), Georgia, Maryland, Massachusetts, New Jersey, New Mexico, Oklahoma, Oregon and Pennsylvania. In Oklahoma (Senate Bill 1084), lawmakers are considering streamlining the process of selling vehicles and boats that are abandoned at self-storage facilities, Zucker said. In New Mexico (House Bill 256), the legislature is looking at shortening the time frame for a lien sale from 90 to 60 days.

In Georgia, Senate Bill 61 has passed the senate, while Maryland lawmakers will discuss two bills on Feb. 26, the SSA said.

“These lien-law efforts are separate and apart from legislative efforts to create limited licenses for self-storage operators who choose to sell tenant insurance at their facilities,” Zucker said. “Such a change occurred in Georgia last year, New York the year before and is now pending in Virginia (House Bill 1731).

“All of these changes that are occurring will benefit self-storage customers in how they can obtain insurance and how they can be notified about their property, and will benefit operators in how they can manage their risks and handle abandoned goods.”

To view the current lien law in your state, visit the Inside Self-Storage Lien Law Registry.